Correlation Between LIFE + and Biogen
Can any of the company-specific risk be diversified away by investing in both LIFE + and Biogen at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining LIFE + and Biogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFE BANC SPLIT and Biogen Inc, you can compare the effects of market volatilities on LIFE + and Biogen and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in LIFE + with a short position of Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFE + and Biogen.
Diversification Opportunities for LIFE + and Biogen
Excellent diversification
The 3 months correlation between LIFE and Biogen is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding LIFE BANC SPLIT and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc and LIFE + is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on LIFE BANC SPLIT are associated (or correlated) with Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of LIFE + i.e., LIFE + and Biogen go up and down completely randomly.
Pair Corralation between LIFE + and Biogen
Assuming the 90 days horizon LIFE BANC SPLIT is expected to generate 1.76 times more return on investment than Biogen. However, LIFE + is 1.76 times more volatile than Biogen Inc. It trades about 0.05 of its potential returns per unit of risk. Biogen Inc is currently generating about -0.17 per unit of risk. If you would invest 538.00 in LIFE BANC SPLIT on October 13, 2024 and sell it today you would earn a total of 37.00 from holding LIFE BANC SPLIT or generate 6.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
LIFE BANC SPLIT vs. Biogen Inc
Performance |
Timeline |
LIFE BANC SPLIT |
Biogen Inc |
LIFE + and Biogen Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with LIFE + and Biogen
The main advantage of trading using opposite LIFE + and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFE + position performs unexpectedly, Biogen can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Biogen will offset losses from the drop in Biogen's long position.LIFE + vs. bet at home AG | ||
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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